Setting Up a Limited Company in Spain

A1: It is a mercantile organisation in which the capital or money invested by the partners is divided into the company’s shares or participations. The investment contributions of the partners could be monetary or non-monetary.

Q2: What types of Limited Liabilities exist?

A2: There are different types of limited liability companies in Spain. Broadly speaking company types will depend on:

The minimum number of partners

Minimum and/or maximum investment required for its establishment.

Social Security system in which partners/workers are or have to be registered.

Some companies may benefit from state or local financial aid and some other sorts of assistance.

In this sense the Limited Companies that may be incorporated within the Spanish territory are:

Company Type

Number of Partners

Minimum

Capital-Investment

Liability

Social Security System

Sociedad Anónima (S.A.)

Minimum 1

Minimum €60,101.21

Disbursed Capital must be at least 25%

Limited to the Capital Invested

Autonomous (independent Worker) for those partners who work in the Company

Sociedad Limitada Nueva Empresa (S.L.N.E.)

Minimum 1

Maximum 5

Minimum €3,012 totally paid.

Maximum €120,000

Limited to the Capital Invested

Autonomous (independent Worker) for those partners who work in the Company

Sociedad Limitada (S.L or S.R.L.)

Minimum 1

Minimum €3,005.06 totally paid.

Limited to the Capital Invested

Autonomous (independent Worker) for those partners who work in the Company

Sociedad Laboral

Anónima

Minimum 3

Minimum €60,101.21

Disbursed Capital must be at least 25%

Limited to the Capital Invested

General or Autonomous System for those partners who work in the Company

Sociedad Laboral Limitada

Minimum 3

Minimum €3,005.06 totally paid.

Limited to the Capital Invested

General or Autonomous System for those partners who work in the Company

Sociedad Cooperativa

Minimum 3

Minimum €1,803.04

Limited

General or Autonomous System

Q3: What’s the advantage of establishing a company instead of being an sole trader or "Autonomo"?

A3: The first and most important advantage is that with a Limited Company your liabilities with third parties are backed up only by the company’s assets. As a independent worker you would have to face any liability with your own personal assets and thus is considered as unlimited.

Q4: Which is the minimum investment required to incorporate a limited liability company?

A4: As shown in the chart above each Limited Company Type has its own minimum investment requirements. Some of them additionally require that the investment is paid (deposited in the Company’s Bank Account) before the company is formally established when signing the title deeds in the Notary.

Q5: What steps must be followed to establish a Limited Liability Company and to start its economic activity?

DNI/NIE of the Manager or authorised person to act on behalf of the company

Deadline. Before starting the company’s activities

9

Partner’s Social Security Registration

Depending on the type of company and the number of shares in the company, working shareholders must register in the Social Security as Autonomo.

City’s Tesorería or Administración General de la Seguridad Social

Official Model TA521 Regimen especial de Autonomos (Special System for Independent workers)

Social Security

Social Security card

Economic Start up Declaration Original and Copy

Constitution Document Copy

DNI/NIE of the insured individual Original and Copy

Deadline: Up to 30 days after starting the company’s activities

10

Company’s Social Security Registration

If the company plans to hire employees

City’s Tesorería or Administración General de la Seguridad Social

Official Model TA6

Social Security Company Registration

11

Workers’ Social Security Registration

When the company hires employees.

If employees are not registered in the Social Security System they must be first registered

City’s Tesorería or Administración General de la Seguridad Social

Official Social Security models TA1 and/or TA2

DNI/NIE copy of the employee

Social Security Card

Deadline: Before the employee starts working for the company

12

Work Centre Operation Start Up Communication

Entrepreneurs must notify the opening of their work centre

Dirección General de Trabajo of your Autonomous Community

Free Model of Work Centre opening

Deadline: Within 30 days after opening the work centre

13

Autonomous and Municipal Licenses

Some economic activities require special licenses or permissions

Depends on the Activity and the licenses or permissions required

Depends on the Town Hall

Depends on the Activity

14

Book of Visits (Inspections) Purchase

When starting activities

Specialized Bookstores or in Inspección del Trabajo

Libro de Visitas

15

Definitive Tax I.D. Number

Once the Company is registered

Administración o Delegación of the AEAT

MODEL 036

Signed y the manager and the partners

DNI/NIE copy of the Model c30 signee

Original Copy and Copy of the Constitution Document

Provisional CIF

Deadline: Before the expiration date of the Provisional CIF

Q6: What is considered as the Social Address of the Company?

A6: The social address of the company is where the main office is located and where the management of the same is effectively carried out. A Spanish Social address must be located within the Spanish territory.

Q7: What is considered as the Fiscal Address of the Company?

A7: The fiscal address of the company is analogous to the social one and hence is the place where the economic and managerial activities of the company are carried out.

Q8: May a Limited Liability Company have Branches?

A8: Yes, It may have branches and as many as it considers necessary for its economic purposes.

Q9: May a Limited Liability company have branches in foreign countries?

A9: Yes, a Limited Liability Company may have its branches either within the Spanish territory or abroad in any foreign country.

Q10: Do I need to produce a Constitution Document?

A10: Yes, it is obligatory to draft the company’s constitution document in order to be able to establish a company. This document has to be notarised and also registered in the Mercantile Registry. This document has to be granted by all the company’s partners.

Q11: What elements or aspects need to be mentioned or be contained in the Constitution Document of the Company?

A11: The aspects or elements to mention in the Constitution Documents are:

Partner’s name and Identification Numbers (NIE, DNI, Passport).

Partners individual investments or contributions.

Number of shares and their unit price.

The appointment of the company’s manager.

Description of the Economic Activity of the company. Company’s purpose.

The Company’s articles of constitution

Q12: What must be indicated in the Constitution Articles of the Company?

A12: The information required in the Company’s Constitution Articles is:

Company’s name and Social Address

Company’s economic activity purpose

Period of the fiscal Economic Activity exercise.

Company’s Capital and Shares

Managerial proceedings and organisation as established by law:

1 Manager

Board of Administrators… among other types.

Normally the Company’s Manager or administrators are the company’s shareholders or partners, but it may be appointed a totally independent person(s).

Comments:

Alex Verdu said:14 February 2011 @ 15:42

The information included in this article is absolutely out of date. Since 1 September 2010 the new Companies Act in Spain (Texto Refundido de Sociedades de Capital) has ended with the difference between Sociedades Anonimas and Sociedades de Responsabilidad Limitada. There are also improtant changes in relation to the share capital and Directors liability. For further information, please do not hesitate to contact our Law Firm, hc solicitors LLP, at spanishgroup@hcsolicitors.co.uk.Regards, Alejandro Verdu de HaroREL/AbogadohcsolicitorsLLP

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